Friday, July 24, 2009

UK Economy Shrinks by Record Level

Bloomberg reports:

The U.K. economy shrank more than twice as much as economists forecast in the second quarter as a record annual slump in construction, banking and business services kept Britain mired in the recession.

Gross domestic product contracted 0.8 percent from the first quarter, the Office for National Statistics said today in London. Economists predicted a 0.3 percent drop, according to the median of 32 forecasts in a Bloomberg News survey. From a year earlier, the economy shrank 5.6 percent, the most since records began in 1955.

Source: National Statistics


  1. Jake,

    The decline is much worse if you consider that the pound has tanked. Actually, the pound has been tanking for decades - from ~ 2.8/dollar in the 50s to ~ 1.4/dollar today. A half off sale against the not so stellar $!

    I have many relatives in Britain. They've wanted dollars for as long as I can remember. Apparently, "less bad" thinking is nothing new.

    North Sea oil gave the pound some relief, but that too is waning.

    The amazing thing is the Brits never lose their sense of humor. Stiff upper lip.

  2. What's the 1.4 per dollar? The Pound is currently ~1 pound per 1.65 dollars...

  3. Jake,

    Oops, you are correct, the puond is at ~ 1.65/dollar. The ~$1.4 was a euro print.

    I will add that several months ago, the pound did fall below 1.4/dollar.

    I'll bet the Brits are glad the BOE unloaded their gold at ~ 1/3 of today's price.

  4. The BoE didn't sell our gold. It was that idiot Gordon Brown when he was Chancellor. Brown will rightly go down in history as the most useless imbecile ever to disgrace government.